Remote Area Housing Benefits

Hi Everyone

Can I please get an advise how to set up remote area accommodation allowance?

From the Contract: employee is casual and paid $30/Hr plus the employer is giving $400 accommodation allowance then the employee will pay back the $400 the rent via FBT?

I would like to know the tax effect in the employees payslip?

Is my set up below correct?

Appreciate your response

Thanks

Fritz

Comments

Acctd4

Hi Fritz

There are a few things to consider/clarify first …

Is this actually an allowance or is it a fringe benefit ???? (Note: These don’t get “repaid” back to the employer so if this is the case it’s neither!)

The true nature of this component will determine how it should be set up - as salary sacrifice (aka a fringe benefit) OR as an allowance.

FBT stands for “Fringe Benefit Tax” - It’s a tax that is paid by an employer, not the employee. The employee receive a tax benefit as the amount being “sacrificed” (hence the term, “Salary Sacrifice”) is deducted from the gross pay before tax so in turn reduces the amount of the employee’s tax liability.

In most circumstances, the employee then reports the grossed-up value (or part thereof if applicable) of this benefit in their tax return. Whilst they don’t pay tax on this amount, it may affect their other liabilities (eg HELP debts, Medicare surcharge etc) as well as eligibility for certain offsets.

Have a look at this resource (specifically the section on salary packaging remote housing rent): https://www.salary.com.au/sites/default/files/ADV_REMOTE_Sept2019.pdf

karelfritz

Hi Shaz

The contract is this. Employee is paid is Casual at $35/hr plus the employee is provided with accommodation as normal place of residence value $400 per week. Location of the house is remote area. Is this a fringe benefit? What are the exact steps to set up this in reckon? Is my set up below correct? It looks like this an FBT to me.

How will i set this up so an employee gets the tax benefit?

Acctd4

OK so the employee isn't actually receiving the $ 400, this is just the value of the benefit, yes ?

If that's the case, it shouldn't be entered (as a FB) on the pay until your tax agent has done the FBT return as they will determine the grossed-up value for the FBT year that should be shown as a reportable fringe benefit (RFB). You then enter that value (set up as a FB) on the last pay for March (as the FBT year is 1 Apr - 31 Mar) in order for it to reflect correctly.

karelfritz

Thank you Shaz.

On the other hand. Can you please advise how to set up a full time employee in reckon hosted.

an employee has an annualised salary contract at 70k computed including the annual leave loading and first aid allowance with normal 38 hours a week.

Do I need to get the hourly rate so i can also track the annual leave and sl?

Appreciate you help.

Thanks

Fritz

Acctd4

Hi Fritz

I’ve replied under your seperate post about this 😁